Joanna Lillis

Fugitive oligarch Mukhtar Ablyazov, who has been on the run from police in Kazakhstan and Britain, has been captured in the south of France, according to a report in the Financial Times.

Ablyazov was arrested on July 31 by French special forces near the billionaires’ playground of Cannes, the FT quoted an unnamed family lawyer as saying. It did not specify on what charges Ablyazov had been detained: Kazakhstan has been pursuing him for alleged financial crimes that Ablyazov denies, and he also has a case to answer in Britain, where he escaped a jail sentence for contempt of court last year by going underground.

Ablyazov formerly chaired Kazakhstan’s BTA Bank, which he also owned through an undeclared holding until it was forcibly nationalized in 2009. Ablyazov fled to London, where he was sued by his former bank for allegedly defrauding it of some $6 billion.

After years of legal wrangling, Ablyazov – who accuses Astana of pursuing him for political reasons and has asylum in the United Kingdom – fled to an unknown destination when the London High Court ordered him jailed for “deliberate and brazen” deception (concealing assets he had been ordered to disclose in the fraud case). Ablyazov was later debarred from fighting the case and the courts ordered his assets sold to compensate BTA Bank.

Kazakhstan’s troubled BTA Bank, formerly run by fugitive oligarch Mukhtar Ablyazov, is still crippled by bad loans more than four years after Astana grabbed the financial institution and sent Ablyazov fleeing abroad, a new study shows.

A staggering 81 percent of BTA Bank’s credit portfolio is made up of non-performing loans (those on which payments are 90 days late or more), according to research by Kazakhstan’s Kursiv business newspaper.

As the International Monetary Fund (IMF) has pointed out over and over again, bad loans are the plague of Kazakhstan’s financial system: The IMF said in June that non-performing loans make up around 30 percent of the total in Kazakhstan’s financial system.

But BTA Bank has by far the highest total, not only in terms of ratio to its credit portfolio but also in monetary terms: Its non-performing loans total 1.7 trillion tenge (around $11 billion), Kursiv’s study, based on data from June 1, shows.

Alliance Bank had the second-largest ratio of bad loans in its credit portfolio (47 percent), followed by ATF Bank (46 percent). Kazkommertsbank had the second largest in monetary terms: 660 billion tenge ($4.3 billion), or 28 percent of its loan portfolio.

BTA Bank was forcibly nationalized in 2009 and Ablyazov, who chaired it and owned it through an undeclared holding, fled to London. There he was sued by his former bank for allegedly defrauding it of some $6 billion.

A simmering water dispute between Astana and Bishkek is heating up, with Kyrgyzstan threatening to cut electricity to its neighbor and reportedly accusing Kazakh officials of attempted extortion – then denying it.

The dispute escalated on July 29 when Kyrgyzstan’s energy minister alleged, according to both Kyrgyz and Kazakh media reports, that unnamed Kazakh officials had attempted to bribe him during water and energy negotiations.

“They openly offered a bribe for the sale of energy at a low price to Kazakhstani consumers,” Osmonbek Artykbayev said in remarks quoted by CA-News.org. Kyrgyz negotiators “managed to hold out,” he was reported to have said.

On July 30, Artykbayev denied ever making such an accusation, using the time-honored explanation that reporters had distorted his words. He said he had been explaining how his ministry had stepped up the fight against corruption in the energy sector. “Unfortunately my words about the fight against corruption were incorrectly interpreted in individual media outlets,” Artykbayev said in remarks quoted by Tengri News.

Last month Artykbayev threatened to halt electric power exports to Kazakhstan, citing a water shortage. “It’s a difficult question, but there is not enough water in the Toktogul Reservoir, and we are faced with the question of supplying our own population,” Tengri News quoted him as saying on June 27. Kyrgyzstan generates over 90 percent of its electricity from hydropower.

For years, Gulnara Karimova, the eldest daughter of Uzbek strongman Islam Karimov, courted the media spotlight, whether as an aspiring pop diva, purveyor of haute couture or a jet-setting football groupie.

A water and land dispute between villagers living on the border between Kazakhstan and Kyrgyzstan has been smoothed over after the governments in Astana and Bishkek were forced to intervene.

A canal which Kyrgyz villagers had blocked for 10 days, plugging the flow of water to farmers on the Kazakh side of the border, has been re-opened, Kyrgyzstan’s Kabar news agency reports.

The water supply was restored on July 17, after Astana sent an official protest letter to Bishkek. Some 50 or 60 inhabitants of the village of Kok-Say in northwestern Kyrgyzstan’s Talas Region stopped the flow of water on July 7, demanding that a 2,600-hectare parcel of land ceded to Kazakhstan in a border agreement back in 2001 be returned to Kyrgyzstan (which was allocated a different plot of land the same size in exchange).

With several villages in Zhambyl Region in southeastern Kazakhstan cut off from water and farmers unable to irrigate some 4,000 hectares of land, the governments stepped in. Astana urged Bishkek to act fast to restore the flow, and “not permit such unilateral actions in future,” Foreign Ministry spokesman Nurzhan Aytmakhanov said in remarks broadcast by Kazakhstan’s KTK TV on July 16. The Kazakh prime minister, Serik Akhmetov, got on the phone to his Kyrgyz counterpart, Zhantoro Satybaldiyev, to step up the pressure to get the water flowing along the 13-kilometer canal into Kazakhstan’s Zhambyl Region.

Astana and fugitive oligarch Mukhtar Ablyazov are engaged in an escalating war of words after Italy expressed contrition for deporting his wife and daughter to Kazakhstan.

Italy revoked the deportation order on July 12, citing failings in the procedure that saw Alma Shalabayeva and six-year-old Alua Ablyazova arrested in an overnight raid near Rome on May 28-29 and whisked to Kazakhstan on a private jet. Shalabayeva is now under criminal investigation in Almaty for allegedly using forged documents.

“It was a grave failure not to inform the government of the entire episode, which had from the start elements and characteristics that were not ordinary,” Reuters quoted a statement from Italian Prime Minister Enrico Letta’s office as saying.

The speed of the deportation was questioned at the time, with Shalabayeva’s Italian lawyer Riccardo Olivo describing it as “incredible” and accusing Rome of having “handed her over as a hostage to a dictator.”

Ablyazov says he believes his wife and daughter are in “grave danger” in Kazakhstan. In a letter to Letta quoted by La Stampa, he hailed the “courageous decision” to revoke the deportation order but said he feared Astana planned to send his wife to jail and his daughter to an orphanage.

Torture and inhumane methods of confinement are rife in Kazakhstan, global human rights watchdog Amnesty International alleged in a new report published on July 11.

The report, “Old Habits: The routine use of torture and other ill treatment in Kazakhstan,” accused Astana of breaking its “bold promise” to the United Nations in 2010 that it “would not rest until all vestiges of torture had been fully and totally eliminated.”

The report singled out fatal unrest in the western oil town of Zhanaozen in 2011, pointing to a “lack of effective investigation and prosecution into the use of excessive and lethal force […] as well as the torture and other ill-treatment” of protestors detained over the violence.

Fifteen civilians died in clashes with security forces in Zhanaozen after a protracted oil strike spiraled out of control. Allegations of torture by detained protestors – who said they had suffered beatings, suffocation, and sexual abuse – were dismissed by investigators and 37 civilians were convicted of unrest-related crimes. Some were amnestied or given suspended sentences; 10 remain in jail, as does opposition leader Vladimir Kozlov (alleged to have fomented the unrest) and six police officers jailed over the demonstrators’ deaths.

Astana celebrated its 15th anniversary as Kazakhstan’s capital with a lavish bash designed to cement the legacy of President Nursultan Nazarbayev.

The country marked Astana Day as a national holiday on July 6, which is also Nazarbayev’s birthday (he turned 73 this year). There is heavy symbolism in celebrating the anniversary of Nazarbayev’s brainchild on the day he was born.

The people of Kazakhstan are used to images of President Nursultan Nazarbayev dominating their TV screens, but it’s rare to catch a glimpse of what makes the man tick.

In a carefully scripted documentary beamed around the country ahead of his birthday this weekend, Kazakhstan got to see the Leader of the Nation’s human face. “Nazarbayev. Live.” – a documentary credited as the brainchild the president’s press secretary – aired on the private KTK channel on July 4.

The film came two days ahead of a big celebration for Kazakhstan: July 6, Nazarbayev’s 73rd birthday, marks 15 years since he moved the capital to Astana.

The documentary struck an informal note, with two young presenters in jeans interviewing a relaxed Nazarbayev, snappily dressed in a blue shirt, purple tie and red waistcoat, over tea in his residence.

Nazarbayev revealed some fond memories: his rural childhood in the village of Shamalgan outside Almaty, when he always wanted to “be first;” his baptism by fire at the furnaces of the Temirtau steelworks, where he started his career and had to “overcome fear” and learn “collectivism” and “discipline.”

From there Nazarbayev built a Communist Party career, rising to the top job as Soviet Kazakhstan’s first secretary in 1989. Archive footage showed him 20 days after that appointment appeasing an irate crowd of striking steelworkers – demonstrating the popular touch he hasn’t lost.